Belgium: Company cars

Since 1 January 2013, all VAT taxpayers must limit the deduction of VAT on company cars to their actual business use. The VAT authorities provided three methods which companies can use to determine the business use of their company cars: keeping a log book, a semi lump sum based on the home-to-work distance and a general lump sum of 35%.

In September a decision was published which clarifies some concepts and provides a new method for fiscal ‘light trucks’. The three methods to calculate the business use more or less remain as they are.  The most important change is that the minimum threshold of four vehicles is abolished, which means that the method of the general lump sum of 35% can be used by all taxpayers.

Furthermore the method of the semi lump sum can only be applied in case there is one “fixed” user of a vehicle and only for one vehicle per user. The percentage must be adapted in case of a change in the actual use of the vehicle.
The new decision provides a separate regime for fiscal light trucks, such as pick-up trucks. In order to determine the right to deduct input VAT for fiscal light trucks used both for business and private purposes, VAT taxpayers may either use a logbook or opt for a new  method, which starts from a general lump sum business use determined at 85%.

To have a consultation by Alessandro Pasut, expert in establishing economic relations between Italy and Central Europe click here.Alessandro Pasut

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